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2 years ago

The Camel Company produces 10,000 units of item Roto 454 annually at a total cost of $190,000.

Business

1 answer:

Nitella [24]2 years ago

6 0

Answer:

$175,000

Explanation:

Given that,

Direct materials = $ 20,000

Direct labor = $55,000

Variable overhead = $45,000

Fixed overhead = $70,000

Number of units offered = 10,000

Rent Revenue = $15,000

Avoidable Fixed Overhead:

= Fixed overhead per unit × Number of units offered

= $4 × 10,000

= $40,000

Relevant Costs:

= Direct Materials + Direct Labor + Variable Overhead + Avoidable Fixed Overhead + Rent Revenue

= $20,000 + $55,000 + $45,000 + $40,000 + $15,000

= $175,000

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2 years ago

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